The United States and Saudi Arabia say Iran will face consequences for an alleged plot to kill the Saudi ambassador in Washington.

U.S. officials said on October 11 that two men linked to Iran's security agencies had been charged in what was described as an "international murder-for-hire scheme" directed from Iran.

Tehran dismissed the allegations as baseless.

U.S. Secretary of State Hillary Clinton said on October 12 at a conference in Washington that Iran's alleged ties to the plot marked a "dangerous escalation" of Tehran's sponsorship of terrorism.

"This kind of reckless act undermines international norms and the international system. Iran must be held accountable for its actions," Clinton said.

"In addition to steps announced by the attorney general yesterday, the United States has increased our sanctions on individuals within the Iranian government who are associated with this plot."

U.S. Vice President Joe Biden described the plot as "an outrageous act where the Iranians are going to have to be held accountable."

Speaking to ABC's "Good Morning America" program on October 12, Biden said the Obama administration was working to unite world opinion behind a possible U.S. response.

And a senior Saudi prince, former ambassador to Washington Turki al-Faisal, said Iran would "have to pay the price" for the plot.

U.S. Secretary of State Hillary Clinton

The U.S. Treasury Department has added an Iranian commercial airline, Mahan Air, to its list of sanctions in connection with the alleged plot.

In a statement, Treasury officials said, "Following the revelation about the [Quds Force's] use of the international financial system to fund its murder-for-hire plot, today's action highlights further the undeniable risks of doing business with Iran."

Officials said the Quds Force regularly uses Mahan Air to transport people to and from Iran and Syria for military training, bring operatives in and out of Iraq, and send weapons around the region.

In Congress, the powerful chairman of the Senate Armed Services Committee said that the plot "may be" an act of war.

But Senator Carl Levin (Democrat-Michigan) also said, "I'd want to see what the implications of that characterization are before I use it."

British Prime Minister David Cameron's spokesman, Steve Field, said London was consulting with the United States and others over possible new international sanctions against Iran.

In Brussels, Maja Kocijancic, a spokeswoman for EU chief diplomat Catherine Ashton, voiced "grave concern" over the allegations and called on the Iranian government to “fully cooperate with the U.S. justice system."

"We trust that the U.S. justice system will rapidly bring full clarity to this alleged criminal act," she said. "And should the facts be confirmed, this would constitute a major breach of international law with serious international implications."

Gulf Cooperation Council chief Abdullatif al-Zayani described the attempt to assassinate the Saudi ambassador as a "flagrant violation of all laws and agreements."

Worldwide Travel Alert

The two accused were named as Manssor Arbabsiar, a naturalized U.S. citizen who holds an Iranian passport, and Iranian-based Gholam Shakuri, said to be a member of the Quds Force -- an arm of the Iranian government's Islamic Revolutionary Guard Corps.

U.S. officials said the plot involved Arbabsiar holding a series of meetings in Mexico with a secret U.S. government informant, whom he allegedly hired to kill Saudi Ambassador Adel al-Jubeir on American soil.

The conspiracy allegedly involves members of the Iranian government paying $1.5 million for the assassination.

U.S. officials said $100,000 had already been wired through a New York bank "as a deadly down payment for their hired gun."

Officials said the plot, as conceived, involved setting a bomb off in a restaurant where the ambassador was dining. They said they stopped the planning before any explosives had been acquired.

In a new worldwide travel alert, the State Department said the alleged plot could be a sign that Iran has adopted what it described as a "more aggressive focus" on terrorist activity.

Iran Denounces 'Childish Game'

But Iran characterized the claims as a diversionary tactic and filed a formal complaint over the matter with the United Nations.

In an open session of parliament, the chamber's speaker, Ali Larijani, denounced the U.S. claims as part of a "childish game."

Foreign Minister Ali Akbar Salehi was quoted as describing the U.S. allegations as "a mischievous scenario" designed to divert the attention of Americans from their internal problems.

Speaking after a cabinet session, Salehi warned the United States against "confrontation," saying, "If they want to impose a confrontation upon the Iranian nation, the consequences of this issue will be more severe for them."

Arbabsiar and Shakuri have been charged with conspiracy to murder a foreign official, conspiracy to use a weapon of mass destruction, and conspiracy to commit an act of international terrorism, among other charges.

Arbabsiar, who briefly appeared in court in Manhattan, could face a life prison sentence if convicted on all charges. Shakuri remains at large.

The Saudi Embassy in Washington thanked the United States for taking action to break up the alleged plot, describing it as a "despicable violation of international norms" that is "not in accord with the principles of humanity."